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Richard Fogoros, M.D.  
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The Problem With Health Insurance

Aug 29, 2009 - 11 comments
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Something touched a nerve yesterday.  I kind of lost my composure when someone tried to defend the insurance industry and responded out of emotion – perhaps putting aside some reason in the process.

I used to get mad at myself or embarrassed when this happened, but now I stand back and try to analyze my reaction.  What is it that touched a nerve in me?  Why did I feel so strongly?  We don’t feel things without reason, and my reaction doesn’t necessarily betray weakness on my part, it shows the depths of my emotion.  That passion usually comes from something – most of the time it is personal experience; and my personal experience says that insurance companies are causing my patients harm.  That makes me angry.

I don’t think the people in the insurance industry are bad people.  I think vilifying people is the easy way out.  The people there feel like they are doing the right thing, and are no less moral than me.  But I do not think the way to fix our system is through letting them do their business as usual in the name of “free market.”  Defending the current system of insurance ignores some obvious problems in our system:

1.  They are financially motivated to withhold services

If you hire a contractor to work on your house, how wise is it to pay them 100% in advance?  You have just given them financial incentive to do as little work as possible, as it will maximize their profits to do so.  The insurance industry is in such a situation; despite any good intention, they are put in a position to decide between profits and level of service.  It is much better to pay more for better service, not worse; but that is what we have done with health insurance companies.

2.  They have been given the ability to withhold services

If all United Health Care (for example) did was to provide insurance, they would not be vilified as they are.  But since the only data available for medical care was the claims data they hold, they were put in a position to control cost.  This was sensible initially, as they had both the data and the means (denying unnecessary care) of cutting cost.  It’s OK that women aren’t kept in the hospital for a week after having a baby.  It’s OK that I can’t prescribe expensive brand-name drugs when there is a reasonable generic alternative.  There was a whole lot of fat to cut, and they did a good job cutting that fat.

The problem came when all the fat was gone and they were used to big profit-margins.  Once there was not any more unnecessary care to cut, they had two ways to keep their profit-margins: increasing premiums or cutting services.  They did both.  Both of these have hurt my patients.

    * Patients have had premiums increased or have been dropped because they were diagnosed with medical problems.  I have had patients beg me “don’t put that in my record,” as they know a diagnosis of diabetes or heart disease will be disastrous.  I am then caught between the pleas of my patients and the demands of honestly practicing and documenting my care.
    * I do what I can to follow evidence-based standards, but there are times when people fall out of the norms.  Medicine is not science, it is applied science.  This means that I am trying to take an individual and somehow match them with the scientific data.  Sometimes it works, but everyone is different.  If something is true 90% of the time, 10% of the people will be exceptions to the rule.  I have repeatedly been told by “gnomes” (people with minimal medical education who sit in front of a computer screen with a protocol for care) what “good medicine” looks like.  They see things as black and white when it is just not that way.  This has caused people to be unnecessarily hospitalized, it has required them to get unnecessary tests to follow their rules.  There is no arguing with people in front of computers.

3.  They covertly ration

Dr. Rich Fogoros (whom I recently met) has coined this phrase to explain what happens in our system.  Because it doesn’t look good to deny necessary care, insurance companies (including government-run ones) resort to making things exceedingly complex.  This makes it look like care is being offered, but not taken advantage of.    What does this mean?

    * The burden of proof is put on the provider to show the tests ordered are necessary.  The assumption is that a test will be denied unless the doc can prove otherwise.
    * Tests are sometimes inappropriately denied.  They then can be appealed, but the appeal process is even more difficult than the initial approval process, and so some people give up.  Every time someone gives up, less is paid out by the insurance company and their profits go up.
    * The rules for coding and billing are so complex, that it is very easy to make mistakes.  This means that an appropriate test ordered by a doctor that is not perfectly coded doesn’t get paid for.  The patient gets the bill and must get the doctor to appeal the denial.  This appeal process, again, is difficult.

Because of this, I have to hire staff whose sole task is to learn all of the rules of the different insurance carriers (including public ones) and then play the game properly with them so that we get as few denials as possible.  I probably spend $70-80 thousand per year to deal with the frustratingly complex system we have.

————

I have health insurance.  I do understand why it needs to exist, but I also see how harmful the current state can be to my patients.  I get frustrated with Medicare and Medicaid as well, but that is not my point.  Just because government run insurance has problems doesn’t do anything to change the problems with private insurance.  The fact that you can be killed by firing squad doesn’t make the gallows any better.

The cost of care has gone up dramatically over the past 10 years while my reimbursement has dropped.  Where is that extra money?

But the system is very broken right now.  It needs to be fixed.  Things need to be changed in both the private and public sector.  When I was in DC I made the point that our ship is sinking and we are arguing about who will be the captain.  The problems in our system are not simply who is writing the checks.

Honestly, I don’t really care who writes the checks.  All I want is for the system to reward good care and to stop hurting my patients.  Those who deny the reality of either of these problems will invariably draw my ire.

*This blog post was originally published at Musings of a Distractible Mind*

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by ILADVOCATE, Aug 30, 2009
Yes I just got denied for coverage by Medicare for Vimpat (Lacosomide) which is being used experimentally for advanced tardive dyskinesia for me as prescribed by my movement disorders specialist. I had tried all known treatments which failed and they decided to approve and monitor the use of Vimpat (which is already FDA approved as an anti-convulsant). However, since its off label I had to go through multiple series of appeals and I was denied up to the level of a fair hearing which I will be contesting but it will be a whole year without coverage and even if I recieve a favorable decision at the fair hearing I will not recieve retroactive coverage for that year. My neurologist can see that it is quite helpful on what were until I started it potentially dangerous dystonic reactions and dysphasic choking spasms which have since then been mitigated. I certainly can understand approving known medications before unknown ones are tried but there never should be an outright denial. Hopefully if the health care coverage we recieve is changed Medicare Part D will be reformed as part of it. The Medicare Rights Center has more information on the whole issue. Thanks for the post. Very informative and I agree.

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by swampcritter, Aug 30, 2009
One fact needs to be corrected. Health insurers do not make massive profits. In fact, many of them are non-profit to begin with. But even the for profit ones make around 3% profit. They do make a high number numerically, but that is because of the number of policies they issue.



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by Sarcastica, Aug 30, 2009
I got sick last august and came out of the hospital with an 11 thousand dollar bill.  I was making $6.50 an hour, and that was BEFORE I lost my job because of this **** economy.  Right now I'm fighting bronchitis and I could use a Zpak to take care of it.  Too bad just SEEING the doctor will cost me $194.00.  I don't have any money.  I barely have enough to feed myself.  I don't know what to do anymore.  I'm sick, I'm broke, and no one cares.  Try to tell me why this is a-ok?

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by 40smama, Aug 31, 2009
My husband's a pharmacist and he daily deals w/insurance companies.  He spends around 25% of his time on the phone w/them trying find meds that will be covered for his patients.  Then he has to go back to the provider and see if they'll write a script for it and then it goes back and forth.  This goes on when he should be doing other things like counseling his patients, etc.

I don't know the answer to all of the mess - my husband believes that we should return to more of a free market approach in hopes to drive health care costs down and give insurance companies less control over patient care.  Another thing that drives him crazy is the contracts that are shoved down providers' throats to accept less reimbursement for services/meds provided.  He says when he starts another independent pharmacy that he will not accept third parties - even possibly Medicare - but will help the patient to file his/her claim.  I know by doing the books that our profit margins have become increasingly worse as the contracts w/third parties become more stringent for lack of a better word.  They may make low profits but they're making it harder and harder for independent pharmacies to stay in business at all.

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by teko, Aug 31, 2009
My husband works but his employer  decided to drop carrying health insurance because of the econemy. I am self employed. After my husbands employer dropped the health insurance, we cannot get coverage because of pre existing conditions and the ones that would cover us were so out of the ballpark with the premiums that we could not afford them either. Do I think something needs done? You betcha!  Out of our paychecks, we pay for medicare and help take care of the poor. Yet, we cannot take care of ourselves? I have a problem with that. We are considered to be above the poor and below the rich! Middle class that falls thru the cracks on just about everything. I think I will commit a crime, go to jail and there they will take care of me!  They dont understand that this is one reason why medicaid is so overwhelmed.  How else would they provide for their children? Abuse of the system starts at the bottom and goes all the way to the top. I vote for a public option or anything else that will get me the health care I need. In fact, im not against a single payor system at all.

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by sk2006a, Sep 01, 2009
I am hoping, hoping, hoping, for a change.  I don't know how much longer my husband and I can hold on to our policy.  He's self-employed, and I cannot work because my parents need too much care.  We're paying $1800.00 a month for a family of three, and each of us have a $2,500 deductible and a $500 per person drug deductible.  After that we pay to pay 30%.  Doesn't sound bad until your child needs a 3-part MRI which costs $10,000.00.  Then the eyes really open up to what a miserable policy we have.  Who on earth could afford a lower deductible, tho???

Blue Cross denied the stomach medicine I need, and to pay for it out-of-pocket it's $350.00 a month.

And I've read many times that some of the larger health insurance companies made over 400% in profit the last year!  How about stop all the expensive advertising and give us a break on our premiums???

I need two surgeries, but don't know how on earth we're going to cope with that 30%.  Then I have to worry about the "what ifs" if something goes wrong.  

Any if anything major should come along?

Bankruptcy. Too bad a few years ago we all lost medical-related bankruptcy protection.



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by 1centwiz, Sep 02, 2009
I wonder what would happen if we went back to the barter and trade method of paying for things... get rid of the middle man who's making a profit and become your own middle man and save some money or make money, which ever way you choose to look at it.

If Dr's are spending hundreds of thousands a year to hire people to get their hard earned money from insurance companies that we pay thousands of hundreds of dollars a year to gamble with us that we won't get sick, do the math. Take that risk on yourself and invest that money each month. In the end, you will come out better for it.

If Dr's could get paid without the hassle of having to hire people to do their billings and collectibles because you have to pay when you are done, right then and there each and every time, do you think they would pass that savings onto the patients?

If you could not get service until you paid your bill, do you think you'd pay it pretty quickly? Would a doctor be able to keep his practice going without being in the arrears with their bills? or having to pay mal practice because of frivolous lawsuits?

Spend a little more time making your food instead of depending on Wally-mart or any other grocery to provide you with instant anything... it's full of **** that keeps the pharmacological industry in business one way or the other. Think about it, what's making us sick and how do they fix us?

Face it, insurance is a scam, it's a pipe dream that we keep filling up for everyone else. It's a gamble plain and simple and it's a gamble we dare not put in the hands of our illustrious government. They can't balance our budget or curb their spending(gambling), or worse yet give our millions and trillions of hard earned American cash back to our own poor in our own country because we are trying to free other countries so that we can get more of what they have and hoard our own resources. What if, say we didn't need those resources anymore? We found, or should I say used, what we already know and put it into use by taking that money we send over seas to people who don't appreciate our generosity because it's not really generosity because we want or demand something in return, and put it back into the country that earned it to begin with? Hmmm.... just a concept here that a meager peon can reason out, or so I think that is... I'm not a politician though or do I a fit in the box type of thinker either.

So Dr., why not put up a new price list with the things you need and trade your services for those? House cleaning = 1 visit, 5 car washes = 1 visit, 5 chickens = stitches, add in corn to feed the chickens and some one to watch them and collect eggs for you at $1.40 a dozen, and you have a what? what price do you put on someone doing that for you so you can help more people? If you charge let's say a round number of $150 per office visit to insurance companies, less the $30 co-pay, less 15% for billing, collections etc. costs, now it's around $100 bucks right? a chicken plucked, skinned and cooked is about $9, delivery another $3, = $12 bucks and if you eat 5 chickens a month that's $60, plus roughly 3 dozen eggs a month per chicken at $1.40 = $4.20 x 5 = $25, add all that together and it rounds out to be about $65 a month that's almost what you get after taxes for a visit right? And how many people could you then trade those chickens and eggs with for what you need? A house, furniture, paintings, pots, pans, plates, you get the picture.

Ok, so that's a lot of work to find all those people and do all that trading, but if you have sick people coming in to see you, well that's one major problem solved, you have an instant market of people streaming into see you every month. instead of hiring someone to bill insurance companies, trade with them to broker your barter system for you. See how it all works? It's called a FREE MARKET for a reason. No taxes, no paying taxes to uncle sam, no money for government to over spend or count on to spend in the future before it's ever made...

Ok, I'm getting off my soap box, because it's about time I realize that some of you will see this and laugh, some with see this and get mad, and some of you will see this and it will make you think... Those are the ones I'm trying to reach. Because the ones that will laugh, already figured this out and are saying it's about time someone said it out loud, the ones that will get mad are the ones that live for the money and feel that they are owed something out of life and the ones that think about it, well, they are the ones who will go out and do it because it makes sense.

And to those of you that think I'm crazy, they said Noah was to build an ark when they had never seen rain. But rain it did and guess what... only those that believed in what others said would never happen, are the ones that survived. Do you want to get caught on the edges when the water starts to rise, or would you rather be afloat in a boat that will rise with the water? The choice is yours. I'm building my boat and I'm sharing the instruction book with you.

B - Basic
I - Instructions
B - Before
L - Leaving
E - Earth

Do you know where you are going and how to get there? Take a gander at history to see how many times we've as a people group in general, continued to follow the money instead of the goodness of our hearts and where they ended up in the long run. That goodness of the heart comes from somewhere and I think it's called Charity, Good Deeds, Selfless acts of kindness and a Holy Spirit. Evil may seem to get ahead in this world, but at what cost? Choose wisely and seek what is right, good, pure, trustworthy, praiseworthy and honest. Build your boat of natural materials and hard work. We all know what happens to plastic and cheaply made products. Don't end up broken and thrown away.

I'd give my 2cents, but with inflation it's only worth 1cent... I'm no wiz, and to be a prophet or a reader of the truth is not an easy cross to bear... Just look at what they did to a man who came to save us from ourselves...

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by teko, Sep 02, 2009
I have noticed during this whole healthcare debate just how many people are more worried about what its gonna cost them, than helping fellow mankind. How sad!  It shows where we have come as a nation for sure.

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by pegasi, Sep 02, 2009
I think everyone is skipping the author's main points, one of which is accessibility to care, another of which is complexity in determining coverage. I think that it's pretty much become obvious that there will be some form of  limiting of care, particularly for the most expensive procedures, to control costs, in health care reform.

If you think about it, insurance companies already limit care, in that they influence when and where we get care due to what copays we have, our deductibles, the plan provisions, the exclusions and other things written into the plans. So, they already "ration" care in that if one's copay is $50, you think twice about going to the doctor, because you may not have that $50 to be able to go. If that's not rationing care, by making your cost a dis-incentive to go, what is?  There will have to continue to be some form of "incentives" to not go to the doctor for frivolous reasons, in order to get a handle on the skyrocketing expenses, like copays, but they need to be reasonable, within people's ability to pay.

I think that outcome based care will have to become the norm. Physicians will be forced to have to evaluate whether or not the proposed treatment will make a difference in the outcome, and if it won't, seriously consider not doing the treatment. The hardest thing will be a change in the current "do everything possible" culture that currently exists, especially with serious illnesses. Sometimes there is simply nothing that will change the outcome, yet we as family members push the medical establishment to continue any and all treatments, regardless of whether or not they will make any difference, just to "do something" and alleviate that helpless feeling that exists because of serious illness or injury has happened to someone we love and we can't fix it. Sometimes all you can do is take some tylenol and wait and let the body do what it can for itself.

Insurance companies need to get away from "legalese" when writing their polices. No one should have to consult a lawyer or legal aide to know what is or isn't covered. Write the thing at a 12th grade reading level, in plain english. The majority of people should have graduated high school, that gives enough of a language level to work with that people can understand. Then both patient and doctor can understand it quickly, without mistake.

Exclusion of care for prexisting conditions is a joke. While the insurance company does this for an entire year, the patient contributes to the company's profits, yet gets sicker because they can't get treated for the things they have wrong, and when they do finally become eligible for treatment for those conditions, are more expensive to treat because they've gone untreated for another year, due to the insurance company's "block" on the patient under the preexisting clause. Makes no sense, to make the patient sicker, and more expensive to treat, because they hadn't been contributing to the company coffers first.

Okay, I'll get off my soapbox, next.....

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by Mom2four85, Sep 03, 2009
I agree something needs to be done asap, and there are no easy answers or fixes.  I wanted to post for those of you who are self employed.  

I don't know if it's the same situation as ours but here's what happened with us - My husband has had a business for 13 years; with just him & me on the payroll.  We had BCBS of FL until they upped our rate from $1200 per month - $1500 with no medical claims due to the "economy" 3 years ago.

We started looking for insurance in Jan 2009, I went through 25 agents just trying to find an agent who would write our policy.   We chose United Healthcare - we pay $861 a month for a family of 4 with a $3,000 yearly family deductible - 100% paid after that 3k is paid.

This is the BEST insurance we've ever had - I broke my 2 small toes which didn't heal right, so I made an appt to have them checked & my yearly checkup.  During that visit, I had to have EKG's (225 each), Genetic testing (3,100) Mammogram, blood testing galore - I paid nothing since I get 1 "free" checkup per year.

I was sent to a cardiologist and had a stress test, holter monitor, echo; xrays, ekg's; they sent me to an EP; more testing, I went into the ER had blood tests, EKG's, monitoring, CT; I ended up having heart surgery EPS & Ablation - my heart stopped during surgery so they had to use paddles to defib me; a tilt table test,  3 sets of Xrays of the chest; Cardiac MRI; Cardiac Cath & Pacemaker/ICD implant.  

I paid the $3,000 ded and that's it, I haven't added all the costs up, but it's probably close to $200k right now and adding up; with my policy now my ded is paid, all meds will be covered.

PM me if you want my agent's name; if she can't write your policy she may be able to help you find someone who can :)

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by jstrm, Sep 04, 2009
What we have in this country from the government/industry consortium’s point of view, is a micro managed “make work” system designed to be confusing and controversial. The majority of the people on the list are there to support this process. They are looking out for their own vested interests. Like all bureaucratic processes, too much money is devoted to administration and paying the armies of junk professional at the expense of the real need of the population that should be served.. We are told we need options and choices. Nonsense. What we really need is standardization, simplified processes, and good treatment to make us better without going bankrupt. Get the insurance parasites out of the system.

I support a single payer system Let the doctors do there job, pay the hospitals their fair amount and let the doors be open to all Americans across this great land of ours.

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